* Focus on U.S. nonfarm payrolls, euro zone debt problems
* SPDR Gold holdings ease a tad as market weakens []
By Chikako Mogi
TOKYO, Feb 4 (Reuters) - Gold prices steadied around $1,110
amid caution on Thursday as investors awaited Friday's U.S. jobs
data that could further boost the dollar, which would undermine
bullion's appeal as a currency hedge.
The dollar kept its firm tone on Thursday after climbing
broadly the day before on improving U.S. jobs and industry data,
while fears Portugal could be the next euro zone country to face
a debt crisis lifted the greenback against the euro. []
The European Union vowed to hold Greece to an austere plan to
tackle the most severe debt crisis in the single currency zone,
but investor remained wary of more such problems.
"The dollar should be firm for a little while as problems in
the euro zone spread from Greece to Portugal," making investors
wonder if more countries might be exposed to similar fiscal
issues, said Ronald Leung, director of Lee Cheong Gold Dealers in
Hong Kong.
"We saw a correction from the highs yesterday as people want
to wait for the nonfarm payrolls data. Liquidity is not enough,"
he said.
The European Central Bank will likely keep interest rates
unchanged at a policy meeting on Thursday, but the bank's future
policy stance will also be a market focus, he said.
Bargain hunters, particularly from China, continued to emerge
and support the market's downside when prices fall below $1,100
per ounce, Leung said.
Traders expected trading to remain lacklustre ahead of the
Chinese Lunar New Year holidays.
Spot gold <XAU=> inched up 0.1 percent to $1,109.55 an ounce
as of 0248 GMT, compared with New York's notional close of
$1,108.85. Spot gold rose to a peak of $1,124.45 on Wednesday,
its highest since Jan. 20.
U.S. gold futures for April delivery <GCJ0> eased 0.2 percent
to $1,110.00 an ounce, compared with $1,112 an ounce on the COMEX
division of NYMEX.
Private U.S. employers reported the smallest payroll decline
in nearly two years in January while the vast U.S. services
sector grew slightly, data showed on Wednesday.
Signs that the pace of job losses is slowing could ease
pressure on the government as it seeks to regain momentum ahead
of Friday's more comprehensive nonfarm payrolls report, expected
to show the economy added jobs last month. []
A Reuters poll of economists gave a median estimate of 5,000
jobs added to U.S. nonfarm payrolls in January after a reported
85,000 job losses in December. Forecasts for January ranged from
a loss of 97,000 jobs to growth of 100,000 jobs.
As the gold market weakened, holdings at the world's largest
gold-backed exchange-traded fund, SPDR Gold Trust <GLD>, eased
0.14 percent to 1,110.339 tonnes as of Feb. 3, down 1.583 tonnes
from the previous business day. Its holdings had stood unchanged
for about two weeks. []
But investment in precious metals remained generally firm.
ETF Securities said total assets of its four U.S. precious
metals exchange-traded products, namely physical gold, silver,
platinum and palladium, now exceeded $1 billion. The company
launched a silver ETF, its first U.S. product, in July.
Precious metals prices at 0251 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1109.50 0.65 +0.06 1.26
Spot Silver 16.36 0.02 +0.12 -2.79
Spot Platinum 1567.00 -5.50 -0.35 6.82
Spot Palladium 432.25 -2.25 -0.52 6.60
TOCOM Gold 3251.00 -5.00 -0.15 -0.25 37404
TOCOM Platinum 4555.00 -26.00 -0.57 3.97 9849
TOCOM Silver 48.50 -0.80 -1.62 -6.19 828
TOCOM Palladium 1265.00 -16.00 -1.25 8.58 301
Euro/Dollar 1.3885
Dollar/Yen 90.87
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Michael Watson)
